The N.C. Solar Center has published guides for residential customers of Duke Energy Carolinas and Duke Energy Progress to demystify the installation of solar-energy equipment and calculate what savings they could expect under the rate programs the two utilities offer.

Jim Kennerly, principal author of the guides with Autumn Proudlove, says funding for the project came from the U.S. Department of Energy’s SunShot program through the center’s participation in the Solar Outreach Partnership. If they prove useful and help promote adoption of rooftop solar projects by residential customers, the center would like to prepare additional guides for other utility customers in other states.

“We wanted to start with something close to home and that would have an impact in North Carolina,” he says. “That is why we chose Duke and Progress.”

Initial costs

The reports start with some basic definitions and a general explanation of how home solar projects work.

But the most helpful parts of the report are likely to be in the detailed descriptions of how much installing solar will cost — after tax incentives and, at Duke Progress, a rebate from its SunSense program — and how much an average customer can save.

Based on the center’s calculations, customers can recoup their investment in a home solar project in as few as seven years. But to do that, the customer must choose the correct solar program and rate schedule.

Tax credits

The tax credits significantly reduce the initial cost of the installation, the center says. North Carolina, through at least 2015, offers a 35% tax credit, and the federal government offers a 30% tax credit.

Using the credits can reduce the typical cost for a solar project in Duke Carolinas' territory from nearly $20,000 to less than $7,600, the center calculates.

The initial price is just a shade less in the Duke Progress territory, the center calculates, and the tax credits can reduce the installation cost to just over $7,400.

And that can be further reduced by $1,600 if the customer opts into the Duke Progress’ SunSense program.

Savings vary

The potential savings are shown both on a monthly bill basis and over the 25-year “useful life” of a solar installation. The savings vary according to which rate option and solar program a customer chooses (flat rates, time of use rates, etc.) and the initial cost of the installation.

By estimating the power likely available to a customer to use and how much the customer could sell back to the utility, the center estimates a customer in Charlotte whose bill averages $152 per month could save more than $56 per month under the most effective combination of rates and programs.

A customer in Raleigh with an average bill of $149 per month could save nearly $53 per month in the right scenario.

Surprising result

The options for customers are laid out in the reports.

One choice jumps out as important. Customers generally have a choice of using net metering — which allows a customer to sell excess energy back to the utility — or selling all of the power produced by the solar panels to the utility through the N.C. Green Power program.

The Green Power option in every case leads to lower savings for the customer owning the solar panels. Depending on the initial cost of the installation (the center uses a calculation for a low, medium and high cost installation), the customer will not make his or her investment back after 25 years.

A surprising result is that despite the lower initial cost for Duke Progress customers if they participate in the SunSense program, the difference in rates charged under SunSense makes for a smaller savings over the life of the system.